ABA Banking Journal - November 2007 - (Page 4)

Editor’s Column WILLIAM W. STREETER Editor-in-Chief Banking JOURNAL ABA USPS-544-030 NOVEMBER 2007 VOL. XCIX, NO. 11 Editorial and Executive Offices: 345 Hudson Street, New York, N.Y. 10014-7115 Phone: (212) 620-7210 Fax: (212) 633-1165 E-mail: ababj@sbpub.com Internet: http://www.ababj.com Published monthly for the American Bankers Association by Simmons-Boardman Publishing Corp. and copyrighted 2007 by ABA; Edward L. Yingling, President, 1120 Connecticut Ave., N.W.,Washington, D.C. 20036, (202) 663-5000. Title registered in U.S. Patent Office. With the exception of official Association announcements, the American Bankers Association disclaims responsibility for opinions expressed and statements made in articles or advertisements published in ABA Banking Journal. Courage in the cubicle THE CURRENT MESS IN THE mortgage market, the details of which continue to amaze as they come to light, has sent shock waves through the global financial system, affecting some banks directly, and others indirectly. It’s become clear that while many people at all points along the convoluted chain from borrower to buyer of SVI paper jumped into what has proven to be a losing game, many others did not. Fortune magazine editor Geoff Colvin recently observed that the subprime meltdown was one of the most widely anticipated collapses ever. “Everybody knew that housing prices couldn’t keep appreciating at the rate they had been,” he said at the ABA Annual Convention. Why then did some jump in and some stay out? The list of reasons for jumping in is long—ranging from outright fraud to poor judgment, poor underwriting, or insufficient oversight. In many cases, however, you could sum it up simply as ignorance, greed, or fear. The counterpoints to those three failings would be reasons for staying out, namely vigilance, integrity, and courage. Each of those qualities is worth a closer look, but courage has special relevance. No company can exist by always saying, “no.” The essence of business is knowing when to say yes and when to say no. As a banker explained in this magazine many years ago, it’s easy in hindsight to question things, but when your competitors are grabbing business, and your boss, board, and investors are demanding earnings growth, you’re under pressure to generate revenue. It’s the rare person who will buck that kind of pressure, because they surmise it will cost them a commission, a promotion, or even their job. To speak up takes courage, a quality we all admire, especially from a safe distance. When we’re on the spot, we find out how uncomfortable it can be. Courage is most often associated with soldiers or rescue workers risking their lives to help others. But really there is, or can be, as much courage in the workplace as on the battlefield. The small situations—if we learn from them—prepare us for the bigger trials. On any given day, something in our life is going to test our resolve. If we cannot stand our ground with a co-worker, a stranger, or even our own children, how will we be able to stand up to a division head, a board member, or a big investor pressuring us to jump into something we know is questionable at best? By definition, anything requiring courage is difficult. The consequences of saying “no” or speaking up range from mockery to lost business to firing. But that’s why we admire those who do speak up or act bravely, and feel disgusted when we don’t. In the events leading up to the current subprime mess, many people did say, “I won’t”—the broker under pressure from the aggregator to deliver volume; the conduit manager under pressure from the Street; the analyst under pressure to “follow the model.” They can now see the benefit of having done so, even if there was a price to pay. But from that price comes something of real value. As long as people who should know better are unwilling to say, “wait a minute,” the momentum of the moment will eventually become excess. Then the difficulty of saying no will become the pain of explaining how we got into this mess. One person bucking that trend won’t likely stop it all, but it will make a difference. bstreeter@sbpub.com Editor-in-Chief Executive Editor Senior Editor Editorial Assistant Art Director Associate Art Director Art Production Manager Contributing Editors Leslie T. Callaway Lucy Griffin Kenneth Kehrer Lisa Valentine Advisory Committee Jeffrey S. Owen Production Director Circulation Director Publisher William W. Streeter bstreeter@sbpub.com Steve Cocheo scocheo@sbpub.com Lauren Bielski lbielski@sbpub.com Andrea Rovira arovira@sbpub.com Wendy Williams wwilliams@sbpub.com Phil Desiere pdesiere@sbpub.com Todd M. Blanchard tblanchard@sbpub.com Ed Blount Nancy Derr-Castiglione Karen Kahler Holliday Bill Orr Edward L. Yingling Virginia Dean Mary Conyers-Brown mbrown@sbpub.com Maureen Cooney mcooney@sbpub.com Gus Blumberg gblumberg@sbpub.com Subscriptions: Call 1-800-895-4389; or write to: Subscription Dept., ABA Banking Journal, P.O. 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ABA Banking Journal (ISSN 01945947, USPS 544-030) is published monthly by Simmons-Boardman Publishing Corp., 345 Hudson St., NY, N.Y. 10014-4502. Periodical Class postage paid at New York, N.Y. and additional mailing offices. Canada Post Cust. #7204564; Bleuchip Int’l, PO Box 25542, London, ON N6C 6B2; Agreement #41094515. POSTMASTER: Send address changes to ABA Banking Journal, P.O. Box 10, Omaha, NE 68101-0010. 4 NOVEMBER 2007/ABA BANKING JOURNAL www.ababj.com/subscribe.html http://www.ababj.com http://www.nexis.com http://www.ababj.com/subscribe.html

Table of Contents Feed for the Digital Edition of ABA Banking Journal - November 2007

ABA Banking Journal - November 2007 Contents Editor’s Column Briefing: Good News for Mortgages Sleight of Mind N.Y. Hiring Bonanza May Be Bane Snapshot: A Look at Held-For-Investment Loan Growth ABA Resources ABA Chairman’s Position “The Moose Bank” Thrives on Manufactured Housing Loans Finding the Middle Way for Your Bank’s Retirement Program Pass the Aspirin Cover Story: Self-Service Steps Up DIY U.K. Style Marketing to Millennials Getting Real With “Gen Wired” Ethnic Marketing: Disinterested Banking Getting Good at Global Sourcing Case in Point Turn Compliance on It's Head Banker’s Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - November 2007

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